Inefficient Supply Chain Planning Processes ? Could be a Culture Issue

The Axe and the tree: Wisdom from a 2500 year old story

In the ancient Indian text of “Jataka Stories”, believed to be compilation of teachings from Buddha, there is a story that goes like this:

A wood chopper who was very efficient at chopping down trees was provided the task to cut down four trees a day. He bought a new axe for the job and he was finished by noon the first day. The second day he was finished by sunset, as the blade of axe started to get dull, on the third day, while he was struggling with the first tree after five hours, a small child passing by asked him -“Why don’t you take a break and sharpen your axe”?

The Wood chopper’s reply was – “I don’t have time to do that, I am falling behind my schedule”.

We create cultures that resist planning

“Often, the arsonist is the best firefighter.” – Anonymous

The basic nature of supply chain is so focused on operations that executives, who have risen through roles in operations, have a bias for action. Planning and strategy are secondary on their radar. We strive for a culture of action, where thinking, planning and strategy become secondary.

The other effect of this culture is that the existing Supply Chain planning capability priorities blow with the wind. It could be inventory this month, demand forecast error next month and the month after that maybe transportation costs. The net result over a period of months is little to no overall progress in high-level objectives.

Driving change in the culture: Planning and strategy should become performance evaluation criteria for supply chain leaders

Supply chains are driven by action but in the modern world, they are also driven by planning and strategy.

In many instances, organizations promote leaders because of the heroic intensity they bring to a crisis, when in fact it would have been far better if they had prevented the crisis from happening in the first place.

Below are some approaches (not an exhaustive list) you can use to embed planning and strategy into your supply chain subculture:

(1) Highlight importance of planning to avoid fires every time someone successfully fights a fire. While they definitely need to be recognized for their heroism, requesting them to look into “what could have been done” from a planning aspect will help them realize that “maybe” the firefighting could have been easily avoided.

(2) Schedule regular operations planning sessions for executive leaders (once a month is optimal). Each session may be like a brainstorming session where the executives are expected to come out with planning and strategy insights. Each subsequent session will build upon the previous session.

(3) Make strategy and planning a key KPI in performance evaluation. Ask leaders to document how many hours they spent on planning and strategizing.

(4) Continuous education should be another KPI in performance evaluation. In this rapidly evolving world, not educating themselves can be extremely dangerous for individuals who are responsible for leading teams.

(5) Create incubators: Every senior supply chain executive should be responsible for “planning incubators” in their department. These incubators need to generate process improvement ideas and opportunities.